Florida business sues Ken Feinberg over oil spill claims process

Oil spill claims czar Ken Feinberg has been sued by a Florida business owner who accuses him and the claims operation of gross negligence and fraud. (AP Photo/Carolyn Kaster)

MOBILE, Ala. -- Ken Feinberg has repeatedly told oil spill claimants that they have two options if they disagree with decisions of his Gulf Coast Claims Facility: file an appeal with the U.S. Coast Guard, or sue BP PLC in court.

A Florida business owner has pursued a third option: sue Feinberg.

John Mavrogiannis, owner of Pinellas Marine Salvage Inc. in Tarpon Spring, Fla., has filed a lawsuit in Florida Circuit Court in Pinellas County, accusing Feinberg and the claims operation of gross negligence and fraud.

Neither Feinberg nor his spokeswoman could be reached for comment Monday.

Brian Donovan, Mavrogiannis’s lawyer, said that this is the first time that Feinberg has been named a defendant in claims-related litigation.

The lawsuit seeks unspecified damages to be determined at trial.

It’s unclear whether the claims operation has actual assets from which damages could be drawn. BP pays for its operating costs, and it writes checks to claimants, from a trust funded by the company.

Pinellas Marine deals in used and refurbished marine parts, supplies and vessels, Donovan said, and is struggling to survive after the federal government closed fishing grounds and imposed a moratorium on drilling in the Gulf of Mexico following the spill.

The company last year requested an emergency payment of $108,000 from Feinberg’s operation and received $88,000, Donovan said. The claims operation promised the remaining $20,000 would be included in a final settlement, but Pinellas Marine requested a final payment more than 100 days ago and has not received a response yet, Donovan said.

Donovan said that Pinellas Marine is suing Feinberg instead of BP because the claims operation “has done more damage to my clients than the BP oil spill itself” with a “delay, deny, defend strategy.”

“This strategy, commonly used by unscrupulous insurance companies, is as follows: Delay payment, starve the claimant, and then offer the economically and emotionally stressed claimant a miniscule percent of all damages to which the claimant is entitled,” Donavan said in a written statement.

Feinberg took over the oil spill compensation process from BP in August, at President Barack Obama’s behest, after Gulf Coast leaders complained that the oil company was slow to write checks and required too much paperwork.

Feinberg has paid out more than $3.5 billion since then, but turned down nearly 300,000 individuals and businesses. Business owners, fishermen, municipal leaders, plaintiffs lawyers and legislators have all criticized his process.

Plaintiff lawyers and attorneys general from the Gulf Coast states have asked a federal court judge in New Orleans to assume more oversight of the claims operation, ranging from throwing out any lawsuit waiver that the facility has received to appointing monitors to review the decisions of its adjusters.

U.S. District Court Judge Carl Barbier, who oversees the multi-district litigation against BP and other companies involved in the summer’s Gulf spill, has yet to rule on the motion.

Feinberg and BP have argued that the court has no jurisdiction over the claims process, and even if it did, the operation is being run according to law.